I recently completed an appraisal for a thriving, 50-year-established dental practice in the heart of a major Canadian city. This isn’t just any practice—it’s an elite, high-functioning operation with metrics most dentists can only dream of.

Consider the Features:

✓ Non-assignment: Patients pay directly—no insurance go-betweens.

✓ No accounts receivable: Cash flow is pristine.

✓ A highly sophisticated clientele: Financially secure, well-educated, and deeply invested in premium dental care.

✓ Minimal no-shows or cancellations.

✓ The receptionist isn’t just a gatekeeper; she’s a force.

✓ A laboratory bill consistently at 12-14% of revenue.

✓ Exceptional treatment planning acceptance.

✓ Crown and bridge fees are 10% above the suggested guide.

✓ Solo dentist. No associates, no partners—just a resolute, long-term team.

✓ A comfortable Monday to Thursday, 9 to 5 schedule.

✓ Gross income of ~$1.3 million per year

✓ Free Cash Flow of just over $675,000!

✓ 8 weeks vacation with office closed.

A dream practice, right?

But then comes the nightmare.

The Imminent Threat: A Time Bomb in the Lease

This practice is housed in a well-known medical building—one with a fundamental problem. It’s old. Outdated. And most critically, the lease includes a short-notice demolition notice.

That means the entire operation could be shut down within months of notice.

And here’s the catch—no one in the building has been able to negotiate out of this clause. Not one tenant.

The $267,000 Reality Check

So how do I present this ticking time bomb to a bank?

How do I justify it to the chartered accountant acting for the purchaser?

The truth is brutal: this practice could last another 20 years in this location… or be gone in months. No one knows. My prediction is 5 years then the demolition ball slides up in the night.

And because of that uncertainty, I had no choice—ethically and professionally—but to apply a $267,000 penalty to the valuation.

The ROI accountant says I was kind and that it should have been more like $1 million!

My client is not pleased. I don’t blame her.

I don’t like it either—after all, I work on commission.

But this is reality.

The Cost of Relocation

When the property owner pulls the lease-ending trigger, relocating this practice won’t be easy. We’re looking at a minimum of $750,000 to rebuild elsewhere. On short notice it could cost up to $1 million.

The Cold, Hard Truth

$267,000 lower sale price. It could be higher once the market speaks.

Not because of patient retention, revenue, or quality of care. Not because of poor management.

Because of the premise lease.

Pull your lease now and read it. Carefully. Locate all amendments or renewal agreements. Send them all to me if you need help.

If you’re in a comparable situation, text me confidentially @ (416) 520-7420.

I have a solution for most impaired premise leases.

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